by John Perkins
2016 August 21
As Chief Economist
at a major international consulting firm, John Perkins
advised the World Bank, United Nations, IMF, U.S.
Treasury Department, Fortune 500 corporations, and
leaders of countries in Africa, Asia, Latin America,
and the Middle
His latest book is,
The New Confessions of an Economic
are driven by this process
of altering human perceptions
My success as chief economist at a major international consulting
firm was not due to the lessons I learned in business school. It was
not due to the competence of my staff of brilliant econometricians
and financial wizards. Those things may have helped at times.
But there was something else that made
it all happen.
That something else was the same
something else that elevated,
Martin Luther King Jr
...and other successful people to the
heights of their success.
That something else is available to everyone of us.
It is the ability to alter objective reality by
changing perceived reality, what we might think of as the
As described in my book The New Confessions of an Economic Hit
Man, my job was to convince heads of state of countries with
resources our corporations covet, like oil, to accept huge loans
the World Bank and its sister
The stipulation was that these loans
would be used to hire our engineering and construction companies,
Stone and Webster,
electric power systems
...and other infrastructure projects
that would bring large profits to those companies and also benefit a
few wealthy families in the country, the ones that owned the
industries and commercial establishments.
Everyone else in the country would
suffer because funds were diverted from,
other social services,
...to pay interest on the debt.
In the end, when the country could not
buy down the principal, we would go back and, with the help of
the International Monetary Fund (IMF),
"restructure" the loans.
This included demands that the country
sell its resources cheap to our corporations with minimal
environmental and social regulations and that it privatize its
utility companies and other public service businesses and offer them
to our companies at cut-rate prices.
It was a strategy of using perceived reality to change objective
In these cases,
Objective Reality 1 was that the
countries had resources.
The Perceived Reality was that using
those resources as collateral on loans to finance the building
of infrastructure projects would create economic growth and
prosperity for all the citizens.
Objective Reality 2, however, was
that economic growth occurred only among the very wealthy.
Since economic statistics (GDP) in
such countries are skewed in favor of the wealthy, the fact was
that only our companies and the wealthy families benefited.
The rest of the population suffered.
In many cases this has led to political
unrest, resentment, and the rise of various forms of radicalism and
"Reality is merely an
We know from quantum physics and
chaos theory that
consciousness, observation, and
changes in perception have impacts on physical reality that can
Modern psychology teaches that perceived
reality governs much of human behavior.
Religion, culture, legal and economic
systems, corporations - in fact, most human activities - are
determined by perceived reality. When enough people accept these
perceptions or when they are codified into laws, they have immense
impact on objective reality.
Human activities - individual, communal, and global - are driven by
this process of altering human perceptions of reality in
order to change objective realities.
A couple of cases from US corporations
Case #1 - Ford
In 1914 Henry Ford's Objective Reality was:
His company sold Model T
cars that were produced through the assembly line
process by workers who were paid a standard minimum wage
Because the assembly line
was monotonous and workers were under a lot of pressure
to reduce the amount of time to build a car from 12.5
hours to less than 100 minutes, there was an extremely
high turn-over rate in Ford's work force
So Ford perceived a new reality.
He raised wages from the standard
$2.34 for a nine-hour day to $5 for an eight-hour day - at a
time when every other car manufacturer was trying to reduce
wages. In addition to keeping workers on his assembly line, Ford
was motivated by a second perception.
He understood that the company, its
workers and the buying public all came from the same population
and he reasoned that,
"unless an industry can so
manage itself as to keep wages high and prices low it
destroys itself, for otherwise it limits the number of its
customers. One's own employees ought to be one's own best
Ford perceived that increasing the
buying power of his workers would have a multiplier effect; it
would also increase the buying power of many others.
Objective Reality 2:
Ford sold 308,000 Model Ts in 1914 -
more than all other carmakers combined. In 1915, sales soared to
501,000. In 1920, Ford sold a million cars. 
In the process, Ford's actions helped
stimulate unprecedented growth in the US middle class.
Case #2 -
Nike, Adidas and other Retailers
Objective Reality 1:
These companies design high-end
footwear and clothing that is manufactured in factories that the
companies do not own in China, Vietnam, and other "sweatshop"
Perceived Reality on the part of management at these companies:
releases their companies of worker-rights
responsibilities and minimizes wages
Hiring highly-paid athletes
to promote products counterbalances the negative
publicity generated by activists who advocate more pay
for sweatshop workers
These policies, that are
diametrically opposed to those of Henry Ford, will
Objective Reality 2:
Low "non-living" wages and
poor working conditions in overseas factories result in
high worker turnover, illnesses, and adverse publicity
By negatively impacting
consumer economic growth, such policies destroy
opportunities for new markets that would result if
workers were paid enough to buy the products they make
and at the same time stimulate the multiplier effect
Neither corporate profits
nor overall economic growth in the countries where the
factories are located are in fact maximized
I had the opportunity to highlight
the difference between the two cases above when a Portland
Oregon (home of Nike) radio station interviewed me.
The host inquired,
"If you could ask Nike founder
Phil Knight one question, what would it be?"
I didn't have to give it much
"Hey Phil, why don't you follow
Henry Ford's advice?" I went on to say, "Imagine if as part
of an international advertising campaign those athletes were
to say something like,
‘Instead of $X millions, I
and a bunch of my friends - other Nike celebrities -
have agreed to have Nike cut our fees by Y%. Nike's top
managers have agreed to similar cuts.
That extra money will go
toward paying workers who make Nike products around the
world higher wages. We believe that by Just Doing It we
will help make the world a better, more peaceful
"That's an awesome idea," the
I couldn't help adding,
"What do you think that might do
to Nike sales? How would it impact the rest of the
"It's all in the mind."
The above are two examples of how the Perception Bridge
There are countless others. These range
from the individuals to corporations and all the way to governments.
Human activity is determined by the ways perceptions impact physical
reality - both consciously and unconsciously.
Here's an example of the global impacts
that a perceived reality in the 1950s has had on every subsequent
generation throughout most of the world.
Case #3 - US
Government Policies in Iran
Objective Reality 1:
Mohammad Mosaddegh was
democratically elected Prime Minister of Iran in 1951
He introduced progressive
reforms including social security, rent control, and
He insisted that foreign oil
companies pay a fair share of their income from Iranian
oil to the Iranian people and when one - now known as BP
- resisted, he set about nationalizing it.
Perceived Reality: The US
government labeled Mosaddegh a Communist, Soviet
puppet, and threat to democracy.
Objective Reality 2:
The CIA overthrew Mosaddegh
in 1953 and replaced him with the Shah, a brutal
pro-Western dictator who "auctioned" Iran to foreign oil
and other companies
Growing discontent led to
the Iranian Revolution of 1979
The Shah was overthrown,
Ayatollah Khomeini took control, 52 US diplomats and
citizens were held hostage for 444 days, US and European
countries broke relations with and initiated sanctions
Islamist militarism expanded
rapidly during the next decades throughout the Middle
The entire region has been
torn by wars and political instability; this has
impacted relationships between countries far from the
Middle East, including the US, China, Russia, much of
Africa and Europe.
We can only imagine how different
the situation might be in Iran, the Middle East, the US, and so
much of the world if the perceived reality had been different -
Perceived Reality: The US
government supports Mossadegh's policies and announces that
it will only purchase oil from companies that pay a fair
share of their income to the people of the countries where
they extract oil.
The US overthrow of Mossadegh
resulted in a series of tragic events that might be considered as
In my experience, such consequences
occur because the people making the decisions do not fully
understand the power of the Perception Bridge.
I've found in my role as advisor to corporations, governments,
executives and as a lecturer at MBA and other programs that taking a
good, hard look at the impact of perceived reality on objective
reality is one of the most efficient processes individuals,
businesses, and other institutions can employ in order to achieve
their true objectives.
I'm struck by how much the perceived
realities in business have been altered since I was in school during
the late 1960s.
I was taught that a good CEO earns a decent return for his investors
and also makes sure that his company is a good citizen, that it
serves a public interest.
We were instructed to take care of our
employees, giving them health insurance and retirement pensions, to
treat our suppliers and customers with deep respect, and to honor
the idea that good business is a win-win for all stakeholders.
In many cases, CEOs made sure that their
companies not only paid their fair share of taxes but also
contributed money to local schools, recreational facilities and
other such services.
All that changed in 1976 when Milton Friedman won the Nobel Prize in
Economics and stated, among other things, that the only
responsibility of business is to maximize profits, regardless of the
social and environmental costs. This was a perceived reality that
became the defining goal for businesses.
It convinced corporate executives that
they had the right - some would say the mandate - to do whatever
they thought it would take to maximize profits, including buying
public officials through campaign financing, destroying the
environment, and devastating the very resources upon which their
businesses ultimately depend.
That perceived reality has resulted in a failed global economic
system, one that is on the path to consuming itself into extinction
- what some economists refer to as Predatory Capitalism.
It is time that we turn this around.
Objective Realty 1:
The glaciers are melting, the oceans
rising, less than 5% of the world's population lives in the US
and we consume about 30% of the resources while half the world's
population lives in poverty, and the resource base that feeds
the economy is in rapid decline.
When Milton Friedman
espoused profit maximization in 1976, financial capital
was seen as scarce while nature was considered abundant;
the planet's ability to absorb pollution and provide
natural resources was considered practically unlimited;
that has since changed
We can build an economy that
rewards businesses that clean up pollution, regenerate
devastated environments, and develop new technologies
for energy, transportation, communications, trade, and
just about everything else - that recycle instead of
ravaging the planet
The responsibility of
business is to serve a public interest while earning
decent rates of returns for investors who develop an
economy as defined in B) above.
Objective Reality 2:
An economic system that is headed
for disaster is converted into one that is itself a renewable
The success stories of humans - as
individuals and as communities - revolve around the relationships of
perceived reality to objective reality.
At this critical time in history, it is
essential that we commit to consciously building Perception Bridges
that will take us into a world that future generations will want to
By understanding that simple
changes in perception bring about monumental changes in
objective reality, we also realize that creating a better
world is not just possible; it can be inspiring and fun...
 Jeff Nilsson, "Why
Did Henry Ford Double His Minimum Wage?"
January 3, 2014, The Saturday Evening Post